Since the Second Circuit’s 2014 decision in United States v. Newman triggered a debate about the personal benefit requirement, several bills have been introduced in Congress to define insider trading. The most recent effort...more
A lot of ink has been spilled over the crime of insider trading, which – in the view of U.S. District Judge Jed Rakoff – “is a straightforward concept that some courts have managed to complicate.” In his recent decision in...more
12/12/2018
/ Breach of Duty ,
Confidential Information ,
Criminal Prosecution ,
Dirks v SEC ,
Illegal Tipping ,
Insider Trading ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman ,
White Collar Crimes
The Second Circuit confirmed this week that a "meaningfully close personal relationship" is not required for insider-trading liability where a tipper discloses inside information as a gift with the intent to benefit the...more
6/29/2018
/ Confidential Information ,
Criminal Prosecution ,
Dirks v SEC ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Martoma ,
Non-Public Information ,
Personal Benefit ,
Quid Pro Quo ,
Securities Litigation ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman ,
White Collar Crimes
The Supreme Court confirmed today that the "personal benefit" required to establish a claim for insider trading can consist of making a gift of material, nonpublic information to a family member or friend and that an exchange...more
12/7/2016
/ Confidential Information ,
Dirks v SEC ,
Fiduciary Duty ,
Financial Markets ,
Illegal Tipping ,
Insider Trading ,
Non-Public Information ,
Personal Benefit ,
SCOTUS ,
Securities Violations ,
Tippees ,
Tippers ,
US v Newman ,
US v Salman
All eyes were on the U.S. Supreme Court yesterday as it heard arguments in Salman v. United States (No. 15-628) concerning the “personal benefit” required to establish a claim for insider trading. After an hour punctuated by...more
On May 26, 2016, the U.S. Court of Appeals for the First Circuit held that friends’ gifts of wine, steak dinners, and other luxury items can constitute the types of personal benefit needed to establish a breach of duty in...more
5/27/2016
/ Breach of Duty ,
Confidential Information ,
Criminal Prosecution ,
Fiduciary Duty ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Mens Rea ,
Misappropriation ,
Personal Benefit ,
Scienter ,
Securities and Exchange Commission (SEC) ,
US v Newman ,
US v Salman
The Second Circuit last week affirmed the conviction of a former corporate executive on charges of insider trading. The court’s unpublished decision on January 14 in United States v. Riley held that the Government had...more
After months of will-he-or-won’t-he speculation about whether the U.S. Solicitor General would ask the Supreme Court to review the Second Circuit’s restrictive insider-trading decision in United States v. Newman, the question...more
A federal judge in the Southern District of New York recently sustained the SEC’s insider-trading complaint against two alleged tippees, holding that, under the pleading standard applicable to a motion to dismiss, the SEC...more
6/11/2015
/ Asset Freeze ,
FRCP 9(b) ,
Insider Trading ,
Motion to Dismiss ,
Pleading Standards ,
Pleadings ,
Quid Pro Quo ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Tippees ,
US v Newman
U.S. District Judge Jed Rakoff issued a decision in SEC v. Payton (S.D.N.Y. Apr. 6, 2015) denying the defendants’ motion to dismiss a civil insider-trading suit filed by the SEC. The court held that the SEC’s complaint had...more
The Second Circuit today denied the request by the U.S. Attorney’s office for the Southern District of New York for panel or en banc rehearing of the landmark U.S. v. Newman decision, which overturned insider-trading...more
On March 25, 2015, U.S. Representative Jim Himes introduced the Insider Trading Prohibition Act. The bill is the latest in a series of efforts to define insider trading following the Second Circuit’s decision last year in...more
Yesterday, U.S. District Judge Andrew L. Carter, Jr. rejected the argument by the U.S. Attorney’s Office for the Southern District of New York to limit the Second Circuit’s decision in United States v. Newman to classical...more
1/26/2015
/ Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Mergers ,
Misappropriation ,
Personal Benefit ,
Portfolio Managers ,
Publicly-Traded Companies ,
Securities ,
Securities Fraud ,
US v Newman
The U.S. Government filed a petition seeking panel and en banc rehearing of the Second Circuit’s December 2014 decision in United States v. Newman and Chiasson, ___ F.3d ___, 2014 WL 6911278 (2d Cir. Dec. 10, 2014). That...more
1/26/2015
/ En Banc Review ,
Hedge Funds ,
Illegal Tipping ,
Insider Trading ,
Material Nonpublic Information ,
Personal Benefit ,
Petition For Rehearing ,
Portfolio Managers ,
Securities ,
Securities Fraud ,
US v Newman
The U.S. Court of Appeals for the Second Circuit recently clarified the elements required to hold a tippee liable for insider trading: a tippee cannot be held liable unless the Government proves that the tippee knew both (i)...more